Govt to extend second phase of trade facility

GOVERNMENT is looking at extending the second phase of Zimbabwe Economic and Trade Revival Facility (Zetref) in the first quarter of 2016 to help companies get affordable finance.

Fidelity Mhlanga

This is despite some of the money being locked up in Interfin Bank, which was liquidated in December last year.

In 2010, government successfully negotiated a US$70 million Zetref facility. Government contributed US$20 million to the facility while AfreximBank pledged US$50 million.

Zetref’s objective is to assist companies to access affordable finance so as to drive capacity utilisation.

Banks will submit requests for drawdowns to AfreximBank.

“In view of the importance and relevance of this facility, Government is extending it and will launch the second phase of Zetref in the first quarter of 2016, with the same objective of assisting companies to access affordable finance,” Finance minister Patrick Chinamasa said last week in his 2016 budget presentation.

Interfin Bank was an administrator of the fund. Its demise resulted in treasury and Afreximbank being exposed to the tune of US$50 million.

The banking institution was placed under curatorship by the central bank in June 2012, after accumulating debts of over US$80 million before being liquidated in December last year.

To date, Chinamasa said about 54 companies drawn from the agriculture, manufacturing, construction, tourism, health, media, distribution and forestry and timber sectors have benefited from the facility with disbursements being made through eight participating local banks.

“It is encouraging to note that the Zetref Facility has enabled most beneficiary companies to increase their capacity utilisation, revenues, employment, as well as greater potential for export capacity. Of special to mention is, Anchor Yeast, Archer and Premier Services Medical Investments (PSMI), among others,” Chinamasa said.

The disclosures by Chinamasa come at a time PSMI is embroiled in scandals where large sums of money have reportedly been siphoned by senior executives through overpriced car acquisitions, insurance fraud and huge salary perks. This has culminated in PSMI failing to pay its workers for several months amid accusations of maladministration and corruption.

The treasury chief admitted that Distressed Marginalised Areas Fund (DiMAF)- another facility set aside to capitalise local industries was affected by non-performing loans due to cyclical problems faced by some companies, poor demand, subsidised imports, and delayed disbursements.